Ans Doc266Y


1. The reporting of net cash provided or used by operating activities that lists the major items of operating cash receipts, such as receipts from customers, and subtracts the major items of operating cash disbursements, such as cash paid for merchandise, is referred to as the:
A. Direct method of reporting net cash provided or used by operating activities.
B. Cash basis of accounting.
C. Classified statement of cash flows.
D. Indirect method of reporting net cash provided or used by operating activities.
E. Net method of reporting cash flows from operating activities.
2. The direct method of reporting operating cash flows:
A. Is recommended but not required by the FASB.
B. Must be used by all companies.
C. Is used by most companies.
D. Is considered supplementary disclosure.
E. Is not recommended by the FASB, but is commonly used.
3. A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash, resulting in a loss of $3,000. The amount to be reported under cash flows from financing activities is:
A. $ (3,000).
B. $(60,000).
C. $(57,000).
D. Zero. This is an operating activity.
E. Zero. This is an investing activity.
4. The accountant for Robinson Company is preparing the company’s statement of cash flows for the fiscal year just ended. The following information is available:
What is the ending balance for retained earnings?
A. $276,000.
B. $202,000.
C. $254,000.
D. $248,000.
E. $174,000.
5. Financial statement analysis:
A. Is the application of analytical tools to general-purpose financial statements and related data for making business decisions.
B. Involves transforming accounting data into useful information for decision-making.
C. Helps users to make better decisions.
D. Helps to reduce uncertainty in decision-making.
E. All of the above.
6. The ability to provide financial rewards sufficient to attract and retain financing is called:
A. Liquidity and efficiency.
B. Solvency.
C. Profitability.
D. Market prospects.
E. Creditworthiness.
7. Net sales divided by average accounts receivable is the:
A. Days’ sales uncollected.
B. Average accounts receivable ratio.
C. Current ratio.
D. Profit margin.
E. Accounts receivable turnover ratio.
8. An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:
A. Continuous improvement.
B. Customer orientation.
C. Just-in-time manufacturing.
D. Theory of constraints.
E. Total quality management.
9. A fixed cost:
A. Requires the future outlay of cash and is relevant for future decision making.
B. Does not change with changes in the volume of activity within the relevant range.
C. Is directly traceable to a cost object.
D. Changes with changes in the volume of activity within the relevant range.
E. Has already been incurred and cannot be avoided so it is irrelevant for decision making.
10. Factory overhead costs normally include all of the following except:
A. Indirect labor costs.
B. Indirect material costs.
C. Selling costs.
D. Machinery oil.
E. Factory rent.
Comparative calendar-year financial data for a company are shown below:
(1) Accounts receivable turnover for 2008.
(2) Days’ sales uncollected for 2008.
(3) Inventory turnover for 2008.
(4) Days’ sales in inventory for 2008.
Problem #3)
1. Managerial accounting is different from financial accounting in that
A. Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization.
B. Managerial accounting never includes nonmonetary information.
C. Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions.
D. Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors.
E. Managerial accounting is mainly used to set stock prices.
2. Labor costs that are clearly associated with specific units or batches of product because the labor is used to convert raw materials into finished products called are:
A. Sunk labor.
B. Direct labor.
C. Indirect labor.
D. Finished labor.
E. All of the above.
3. Classifying costs by behavior involves:
A. Identifying fixed cost and variable cost.
B. Identifying cost of goods sold and operating costs.
C. Identifying all costs.
D. Identifying costs in a physical manner.
E. Identifying both quantitative and qualitative cost factors.
4. Products that are in the process of being manufactured but are not yet complete are called:
A. Raw materials inventory.
B. Conversion costs.
C. Cost of goods sold.
D. Goods in process inventory.
E. Finished goods inventory.
Information for Gifford, Inc., as of December 31 follows:
Prepare a manufacturing statement for the year ended December 31.